Interest on Client Money. Another new rule?

In recent years we have seen the rules regarding interest on client money change several times. In the early 2000’s a firm was required to account to the client for any interest accrued over £20.00. Then in 2008 and after the recession hit, it appeared that the SRA understood that reaching a £20.00 mark for interest was unlikely and stated that the £20.00 rule was no longer in effect but the firm had to have a strict policy which accounted for client interest. We’re now in 2020 and the new SRA Accounts Rules are fully in place, with a much-reduced document overall.

The rule as it stands today is shown below:

Rule 7: Payment of interest

7. You account to clients or third parties for a fair sum of interest on any client money held by you on their behalf.

8. You may by a written agreement come to a different arrangement with the client or the third party for whom the money is held as to the payment of interest, but you must provide sufficient information to enable them to give informed consent.

This is a departure from the policy rule and a significant departure from the £20.00 rule from the early 2000’s. It is still up to the firm to decide what is a “fair” sum of interest but there is no longer a need for a strict, separate written policy surrounding client interest alone.

Whilst this seems a lot easier, it is always recommended that a firm have some documentation which covers Rule 7. This ensures clients have been treated fairly and understand fully the position with the firm. Having the firm’s default position in the standard terms and conditions is a good place to start, ensuring that from the outset the client understands whether the firm pays interest, and if so, how much. It is worth bearing in mind that under this rule, the firm does not have to pay any interest, providing there is an explanation as to why. Reference to the current financial climate is a “fair” reason as to why it will not be paid on standard matters. If there is a specific matter involving significant sums of money, then bespoke terms and conditions should be drawn and sent to the client at the beginning of the case. This demonstrates transparency over interest on client money from the outset. This documentation gives the client the opportunity to contact the firm if they are unhappy with the interest arrangements, opening discussion before the case starts if necessary.

Like many of the new rules, on the face of it, it appears that everything is simpler. I would counter this interpretation by saying rather than “simpler” it’s more that the SRA is giving firms more responsibility to come up with their own approach and determination about what is “fair”. This does not necessarily mean that the firm should be any less vigilant. Good documentation and transparency with clients are essential from the outset. Utilising documents such as the standard T&C’s to accommodate interest policies is a great way to streamline rules like this one.

I always recommend reading further into the new rules rather than take them at “face-value”. Whilst the SRA have simplified the rules, it does not mean that the firm should be any less vigilant on the implementation of them. Erring on the side of caution is usually the safest course of action. Being able to demonstrate that the firm complies with the simplified rules via its own policies is essential.

Alex Simons
New Business Manager
The Law Factory

First Floor Offices,
2 Sear House,
Bye Street,
HR8 2AA,
Tel: 01531 637882, Fax: 01531 636457




Back to the SOLICITORS group News

Media Centre

“The Solicitors Group online directory is an established and respected channel for legal professionals, meaning I can talk to my existing and future customers about products and services both quickly and easily.”

Carole Hatton
Marketing Manager
Landmark Information Group

“Reaching our niche market can sometimes be challenging, however we find promoting our legal training courses on an excellent way of contacting both existing and new customers. The service we receive from The Solicitors Group is both professional and relevant to our core activities and we would recommend their services to others.”


“I must say that to date we have been very pleased with the referrals we are getting from your site.”

Paul West
Orchid Cellmark

“The Newsdesk feature on is ideal for us. Its prominent location on the site provides a great platform to communicate key messages to existing and potential clients.”

Neil Phillips
Marketing Manager
Countrywide Legal Indemnities

"We are very happy with the referrals we are getting from The Solicitors Group web-site."

C.A. Bishop
Technical Director
Wickham Laboratories Ltd

“We received 419 click-throughs to our site from advertising with”

Legal Prospects

“Putting myself in my potential client's shoes, I consider to offer perhaps the clearest and most user-friendly listing of expert witnesses, especially in its choice of index terms.”

Ivan Vince
ASK Consultants

“The banner ad looks great”

Samantha Dawson
The Bundle Business Limited

“The Solicitors Group has been fantastic in helping us to raise awareness about bowel cancer, which kills 16,000 people every year in the UK. Bowel Cancer UK aims to save lives by raising awareness of bowel cancer, campaigning for best treatment and care and providing practical support and advice. Without the support of organisations such as the Solicitors Group we would be unable to carry out this vital work. We are very grateful to the team at the Solicitors Group for their support and assistance.”

Tamara Matthews
Legacy Officer
Bowel Cancer UK

“As a result of Law London, we have registered 208 new companies/firms to the website, generating £20,797 GWP to date, as well as reinforcing our presence in this very profitable marketplace.”


“The event was well put together and executed, and the traffic of potential customers for us was high. We had a number of enquiries regarding our services after the event and we feel our attendance there was important to our overall brand exposure. We feel a Law event of this size without Euromoney Legal Training present could potentially be hurtful to us as a business. We would recommend you to attend and shall ourselves be there again in 2008.”


“Many thanks for the prompt service.”

Martin Gibbs MBE
Director / Investigator
Griffin Forensics Ltd

“A targeted email to key customers is an invaluable method of communication, endorse this with the Solicitors Group branding, relevant editorial content and you have created a winning combination! We look forward to reading the next edition.”

Carole Hatton
Marketing Manager
Landmark Information Group

“Talking directly to Property Lawyers is critical to us as they are key customers or potentially could be for all of our products, The Solicitors Group offer a perfect solution to get our messages right to the right people”

Carole Hatton
Marketing Manager
Landmark Information Group

“Thank you for having a useful and informative site, it is good to see a comprehensive and friendly portal.”

Stefan Fann
UK Probate Services

“Cadogans aims to keep its brand image in front of lawyers who may be looking for engineering experts. A check on Google analytics showed that referrals to our website from The Solicitors Group website were above average.”

Daphne Wassermann
Technical Director